Paul Hastings and Align Technology Inc. Secure Precedent-Setting Intellectual Property Case Victory before the ITC

April 09, 2014

San Francisco - Paul Hastings LLP, a leading global law firm, represents Align Technology Inc., in a precedent-setting intellectual property infringement victory before the International Trade Commission (ITC) that has resonated throughout the IP community. In that victory, Align successfully argued that the ITC must recognize cross-border electronic transmissions as "importations" of "articles" under the jurisdiction of the ITC.

The case marked the first time the ITC addressed that jurisdictional question, and the importance of that issue to the US economy attracted attention and extensive briefing from a collection of companies ranging from Google Inc. to the Motion Picture Association of America. At Align's urging, the ITC has now confirmed that it is a viable forum for U.S. companies seeking to defend their intellectual property from foreign infringement in an increasingly digital age.

Align initially filed its ITC complaint in March 2012, accusing ClearCorrect Operating, LLC and ClearCorrect Pakistan (Private) Ltd. of infringing 40 claims in seven patents by utilizing digital data and treatment plans imported from Pakistan to make competing dental devices. ClearCorrect sought to make it difficult to enforce the patents by splitting up its infringing design and manufacturing activities between its Pakistani and U.S.-based entities.

Following a hearing in February 2013, the Administrative Law Judge issued an Initial Determination finding that all 40 of Align’s asserted claims were valid and that ClearCorrect infringed 37 of them. To address ClearCorrect's ongoing infringement, the ALJ also recommended a cease-and-desist order be issued against both ClearCorrect entities prohibiting them from continuing to infringe Align's patents. In April of this year, after receiving extensive briefing from the parties and various industry participants, the ITC confirmed that it has jurisdiction to prohibit the importation by electronic transmission of digital files that infringe patents or other intellectual property rights, and largely affirmed the ALJ's determination. Following the ALJ's recommendations, the ITC found that ClearCorrect infringed five of Align’s patents and issued cease-and-desist orders against both ClearCorrect entities.

In securing this resounding victory, Paul Hastings and Align thwarted ClearCorrect's attempt to use inconsistencies in the patent laws to allow infringers to avoid enforcement by splitting up their infringing activities between different entities in different countries. Indeed, the ITC's decision will protect more than just Align: as the Commission acknowledged, the opinion strengthened the ability of US companies to address the violation of IP rights digitally and across borders, which should have a significant impact on the technology and media industries as would-be infringers continue to digitize their processes and search for loopholes in US IP protections.

With the ITC process now resolved, Align will likely resume its federal court patent infringement case against ClearCorrect in order to recover monetary damages that were unavailable at the ITC.

The Paul Hastings Team included San Francisco partner Thomas Counts, who has represented Align for over 11 years, San Diego partner Elizabeth Brann, Washington DC of counsel Timothy Cremen and San Francisco associate Ryan Nier.

Paul Hastings LLP is a leading global law firm with a strong presence throughout Asia, Europe, Latin America, and the United States. Through a collaborative approach, entrepreneurial spirit, and commitment to client service, the professionals of Paul Hastings deliver innovative solutions to many of the world’s top financial institutions and Fortune 500 companies.